What Happens to the NPV of a One-Year Project If

question 11

Multiple Choice

What happens to the NPV of a one-year project if fixed costs are increased from $400 to $600, the firm is profitable, has a 15 percent tax rate and employs a 12 percent cost of capital?

• A)NPV decreases by $200.00
• B)NPV decreases by $173.91
• C)NPV decreases by $130.00
• D)NPV decreases by $113.04

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Definitions:

SSRIs

Selective Serotonin Reuptake Inhibitors, a class of drugs typically used as antidepressants in the treatment of major depressive disorder and anxiety disorders.

Depression

Depression is a mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.

Prescribed

Prescribed involves a recommendation or directive, often regarding medication or treatment, given by a qualified healthcare professional to a patient.

Sensitization

An increased reaction to a stimulus after repeated exposure to it, leading to heightened responsiveness or sensitivity.